CEO: Cost, Texas hurdles for proposed super grid

October 30, 2009

Freedom New Mexico: Liliana Castillo A wind farm in Sweetwater, Texas. Wind and solar energy will play a predominate role in Tres Amigas plans to build a super grid in Clovis. But Texas energy policies might stop the whole deal before it can get off the ground.

By Eric Butler: Freedom New Mexico

Phil Harris knows the concept of an electrical supergrid isn’t as tangible, say, as the potential opening of a retail store or restaurant.

“No, you definitely wouldn’t want to wrap your hand around a power line,” Harris said.

But the Tres Amigas project, of which New Mexico native Harris is the founder and CEO, has enormous potential significance for the Clovis and Portales area if he pulls it off.

“It’ll be a whole new ballgame for Clovis, New Mexico, if it clears the hurdles,” said Chase Gentry, executive director for the Clovis Industrial Development Corporation (CIDC). “The building and amount of employees won’t be all that large, but the spin-off will be huge.”

Tres Amigas, based in Santa Fe, picked land in Clovis as the spot to attempt building an electricity-transmission substation that would link the nation’s three power grids.

Clovis’ location — within 100 miles of the Eastern grid, the Western grid and the Texas grid — make it one of the few ideal areas to try the venture.

Hurdles do exist, however, and one is the cost.

Although Harris said his company has already attracted investors to fund the initial stage of development up to the year 2012, he estimates the start-up cost will be between $500 million and $1 billion.

“Once we determine who all the subscribers are, it could go up to $3 billion,” Harris said.

Those numbers are simply staggering for those used to eastern New Mexico economy figures.

“The thing that’s really problematic is the cost. We’ve had projects that cost $30 million or $40 million and it’s taken years for those to happen,” said Gene Hendrick, CIDC business recruiter.

Since it’s strictly a private venture, no government funds are part of the equation.

Harris is the former CEO of PJM Interconnection, which operated across the Eastern U.S. grid in 14 states. Harris, originally from Lovington, said four power companies have already committed to connecting to the would-be station in Clovis.

“This is something I started to engineer two years ago as a way to solve the problems of all the different renewable (energy forms),” Harris said. “I’ve got an awful lot of my own money in the design of it. But we’ve put together an engineering solution on how to move power back and forth ubiquitously.”

Ultimate success for the project would be the ability, for instance, to send energy generated by New Mexico wind farms to Pennsylvania or to have solar power in Florida utilized in Oregon.

Another potential hurdle, as raised in a recent Popular Mechanics magazine article, might be the reluctance of Texas to participate in the overall supergrid.

The Texas grid, managed by the Electric Reliability Council of Texas (ERCOT), enables power companies to do a large amount of business in Texas alone without having to worry about guidelines for the other grids.

But Harris said his company plans to petition the Federal Energy Regulatory Commission at the end of November. The goal is to remove barriers for Texas companies wanting to take part in a nationwide energy grid.

“We’re getting permission from Federal authorities. The way we’re doing it under the Federal Power Act, is that they’ll still be state regulated, but they will not be regulated under the Federal Energy Regulatory Commission,” said Harris, who added that he “fully expects” the FERC to approve Tres Amigas’ petition which he plans to file Nov. 30.

Another opinion offered by the Wall Street Journal suggests Eastern states, for various reasons, will resist joining a nationwide network.

Harris points out, however, the foundation of Tres Amigas won’t be on a state-by-state basis — it’ll be company by company.

And the Wall Street Journal opines that, “Clovis, New Mexico, might just be the cornerstone of a clean-energy revolution.”

Likewise, Popular Mechanics states the Tres Amigas superstation “seems like a no-brainer (technological hurdles excepted).”

If and when the five-year project comes to fruition, the business climate and even the demographic composition of Clovis could certainly change.

“You’re certainly going to get all the renewable businesses — wind, solar, increased natural gas and all the services that support those industries,” Harris said. “It’s high-skilled jobs that are necessary to support more infrastructure — which puts money in the economy and so forth.”

Harris does offer something the public might be able to wrap its collective mind around. Asked to describe the focal building for Tres Amigas, Harris said the control center might be confusing technically — but familiar in another way.